Commentary and Tracking of a Portfolio of Stocks using approach from "The Little Book that Beats the Market" by Joel Greenblatt aka Magic Formula Investing

Sunday, May 29, 2011

May 28th 2010 Tracking Portfolio

As my faithful readers know, I track the top 50 stocks over $100 every month from the official MFI website. I hold them for a year and then report the results here. This should come pretty close to replicating the portfolios JG created in TLBTBTM.

The May 2010 was not a winner, at least on a relative basis. It was up 19.3% versus 25.4% for the Russell 3000. The portfolio had two stocks (SOLR and CF) with gains over 100%. The bane of the portfolio was the three Chinese RTOs (CSKI, UTA and CEU). Yes I am familiar with those names.

Stock

Initial Price

End Price

Pct Change

52 week low

Mkt Cap

CF

68.36

155.19

127%

57.56

3,332

SOLR

5.46

11.53

111%

4.96

785

ENDP

20.94

41.52

98%

20.16

2,439

CBI

19.84

37.49

89%

16.64

2,004

SNTA

3.13

5.83

86%

2.55

127

CBST

21.50

38.29

78%

20.08

1,252

LO

68.35

114.96

68%

70.24

10,938

MRX

22.97

37.55

63%

21.02

1,350

IDCC

26.05

42.32

62%

23.73

1,146

RAI

24.46

39.49

61%

25.22

15,196

MHP

27.21

42.20

55%

26.95

8,771

VPHM

12.17

18.86

55%

10.29

947

PDLI

4.28

6.58

54%

4.66

642

PPD

46.32

66.27

43%

44.01

464

FWLT

24.01

33.89

41%

20.33

3,061

FRX

25.88

35.78

38%

24.17

7,826

RGR

15.45

21.11

37%

12.66

301

IPXL

21.08

27.18

29%

14.70

1,317

TNDM

13.44

16.89

26%

9.87

444

CBPO

12.89

16.10

25%

9.31

297

CNU

3.87

4.82

25%

3.25

233

USMO

12.58

15.62

24%

12.20

312

NSR

21.39

26.54

24%

20.20

1,602

GME

22.79

28.21

24%

17.70

3,484

IMMU

3.48

4.30

24%

2.81

262

DLX

20.74

25.50

23%

16.57

1,102

JCOM

23.14

28.27

22%

21.00

1,025

EME

24.97

30.22

21%

22.29

1,655

UIS

23.20

27.70

19%

17.04

986

SNTS

2.89

3.34

16%

2.09

169

TTT

7.24

7.81

8%

6.60

302

TSRA

17.38

17.19

-1%

14.96

872

RTN

50.73

50.03

-1%

42.65

19,832

CHKE

19.47

19.06

-2%

15.72

181

ELNK

8.07

7.84

-3%

7.61

927

AHCI

2.67

2.55

-4%

1.86

121

UNTD

6.41

5.93

-7%

4.75

590

AFAM

36.37

30.48

-16%

23.50

333

VALU

16.97

14.07

-17%

12.92

198

PRSC

16.39

13.29

-19%

11.88

212

OSK

35.53

27.79

-22%

24.63

3,186

APOL

53.16

40.22

-24%

33.75

8,059

CHOP

6.06

4.41

-27%

4.26

254

ARO

27.71

19.08

-31%

17.06

2,605

AMED

49.72

31.11

-37%

22.82

1,414

UEPS

14.32

8.36

-42%

7.29

650

CYTK

2.94

1.43

-51%

1.20

184

UTA

8.36

3.96

-53%

3.25

142

CEU

4.30

1.02

-76%

-

129

CSKI

12.66

2.83

-78%

2.73

213

Every Tracking Portfolio Back to January 2006

Below I list how every tracking portfolio has performed back to January 2006. I have two "sub" portfolios, one I call "New", which only has stocks that were not in any of the prior 11 portfolios and "Dividend", which has stocks with dividends (per Yahoo Finance) > 2.59%. I then show all three of those portfolios as if you had invested $100,000 equally over the first 12 months. I do this as Average Percentages are not reliable. If You go down by 50% and then up by 50%, you are much worse off than down 10% and up 10%. Volatility matters.

Average of Percent Change

Date

Total

IWV

1/6/2006

16.0%

10.9%

2/17/2006

21.2%

14.6%

3/29/2006

13.0%

9.6%

4/7/2006

10.3%

12.1%

5/12/2006

20.4%

18.6%

5/31/2006

29.2%

23.3%

6/30/2006

22.4%

20.0%

7/31/2006

19.7%

17.3%

8/31/2006

13.0%

13.3%

9/28/2006

12.7%

14.6%

10/27/2006

10.3%

12.0%

11/29/2006

-0.3%

4.8%

12/28/2006

-6.9%

3.4%

1/26/2007

-10.2%

-6.6%

2/27/2007

-3.7%

-1.0%

3/26/2007

-9.8%

-5.5%

4/27/2007

-10.9%

-5.0%

5/29/2007

-11.5%

-6.3%

7/3/2007

-30.0%

-15.6%

7/30/2007

-19.9%

-11.5%

8/30/2007

-12.5%

-8.7%

9/27/2007

-19.0%

-18.2%

11/2/2007

-40.4%

-34.3%

11/28/2007

-40.1%

-38.3%

12/28/2007

-36.3%

-40.0%

1/25/2008

-36.4%

-35.9%

2/26/2008

-51.7%

-41.5%

3/24/2008

-40.9%

-36.8%

4/25/2008

-25.6%

-31.0%

5/28/2008

-22.2%

-33.6%

7/2/2008

-11.7%

-25.3%

7/29/2008

-10.5%

-20.9%

8/29/2008

-13.8%

-17.9%

9/26/2008

-4.3%

-10.0%

10/31/2008

18.7%

13.9%

11/26/2008

50.9%

27.7%

12/26/2008

48.9%

32.3%

1/23/2009

59.3%

36.4%

2/27/2009

92.8%

55.6%

3/27/2009

85.8%

48.1%

4/24/2009

69.7%

45.8%

5/29/2009

31.8%

22.8%

6/29/2009

21.3%

24.0%

7/29/2009

19.5%

15.9%

8/28/2009

7.4%

8.8%

9/25/2009

12.6%

12.4%

10/30/2009

22.7%

18.3%

11/27/2009

24.3%

13.6%

12/31/2009

23.7%

18.1%

1/22/2010

19.0%

20.6%

2/26/2010

18.6%

23.6%

3/25/2010

10.0%

15.4%

4/23/2010

7.1%

11.4%

5/28/2010

19.3%

25.4%

6/29/2010

24.6%

31.8%

7/29/2010

15.0%

24.6%

9/2/2010

30.2%

25.6%

9/24/2010

22.9%

19.1%

10/29/2010

15.4%

14.9%

11/26/2010

14.0%

13.7%

1/3/2011

5.8%

5.9%

1/28/2011

2.3%

5.7%

2/25/2011

2.9%

1.7%

3/24/2011

2.0%

2.3%

4/21/2011

-0.5%

-0.2%

Grand Total

7.9%

5.7%

Closed

7.1%

4.1%

Open

12.2%

13.2%

Category

Value

Total

125,790

Total New

117,231

Total Dividend

230,034

Total Russell 3K

117,574

Clearly it has been a winning strategy to go with the dividend stocks. Here are the dividend stocks that just expired:

Stock

Initial Price

End Price

Percent Change

LO

68.35

114.96

68%

RAI

24.46

39.49

61%

MHP

27.21

42.20

55%

PDLI

4.28

6.58

54%

USMO

12.58

15.62

24%

DLX

20.74

25.50

23%

CHKE

19.47

19.06

-2%

ELNK

8.07

7.84

-3%

UNTD

6.41

5.93

-7%

VALU

16.97

14.07

-17%

Tobacco did very well. Overall up 25.6%.

May 27th 2011 Portfolio

If you are playing along at home, I have also just set-up my May 27th 2011 portfolio. Here are the "new" stocks... there are quite a few:

Date

Stock

Initial Price

End Price

5/27/2011

USNA

29.4

29.4

5/27/2011

PRX

33.62

33.62

5/27/2011

NVMI

10.18

10.18

5/27/2011

LRCX

45.96

45.96

5/27/2011

LTXC

9.18

9.18

5/27/2011

KLIC

11.59

11.59

5/27/2011

ESI

70.87

70.87

5/27/2011

DEPO

8.63

8.63

5/27/2011

CRAY

6.23

6.23

5/27/2011

CSCO

16.46

16.46

Here are the dividend stocks...

Date

Stock

Initial Price

End Price

5/27/2011

UNTD

5.93

5.93

5/27/2011

USMO

15.62

15.62

5/27/2011

STRA

120.68

120.68

5/27/2011

RLRN

10.74

10.74

5/27/2011

RTN

50.03

50.03

5/27/2011

PETS

12.65

12.65

5/27/2011

PDLI

6.58

6.58

5/27/2011

GNI

100.22

100.22

5/27/2011

DLX

25.5

25.5

5/27/2011

CMTL

27.86

27.86

5/27/2011

CHKE

19.06

19.06

5/27/2011

HRB

15.97

15.97

Mechanical Portfolio Update

Finally, to cap off my lengthy month-end blog, I also add every week to 2 mechanical portfolios (with links for you in the left margin). The first is new stocks each week to the top 30 from the official list in the past 52 weeks. The second are new stocks to the top 50 (both 50m +). There were some new stocks this week. To the top 30, DELL and NVMI showed up for the first time in the past year. I own both of them, so hopefully that will augur well. Then LRCX made the top 50 list. It seems we're seeing a lot of semi-conductor equipment firms (NVMI, LRCX, KLAC to name a few) hitting the lists of late.

3 comments:

Marsh,You may want to add another reference point for performance comparison: an equal-weighted mid-cap index fund; or at least an equal-weighted S&P index fund. That would be more inline what the MFI's a priori selection criteria.